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Two Balanced Growth Paths Based on an Endogenous Production Function

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Optimization and Applications (OPTIMA 2023)

Part of the book series: Lecture Notes in Computer Science ((LNCS,volume 14395))

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Abstract

The endogenous production function presented in this paper allows for two solutions to the problem of finding balanced growth in a dynamic model of the economy. The endogenous production function is constructed on the basis of a microeconomic description of the dynamics of production capacities by technology. At the micro-level, it is assumed that the number of jobs is set at the time of creation of a production unit, and production capacity of this unit falls at a constant rate. In addition, an age limit of production capacity is set. Then it is possible to construct a production function and obtain its analytical expression under balanced growth path. This expression for the production function contains, among the parameters, the share of new capacities, the rate of decline of each capacity at the micro-level, the growth rate of scientific and technological progress, and the age limit of capacities. The rate of economic growth depends on these same parameters, which makes Solow problem of the golden growth rate for the endogenous production function more interesting.

The publication has been prepared with the support of the “Research and development program using the infrastructure of the Shared Center of FRC CSC RAS”.

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Authors and Affiliations

  1. Federal Research Center “Computer Science and Control” of the Russian Academy of Sciences, Moscow, Russia

    Nicholas Olenev

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  1. Nicholas Olenev
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Correspondence to Nicholas Olenev .

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Editors and Affiliations

  1. FRC CSC RAS, Moscow, Russia

    Nicholas Olenev

  2. FRC CSC RAS, Moscow, Russia

    Yuri Evtushenko

  3. University of Montenegro, Podgorica, Montenegro

    Milojica Jaćimović

  4. Krasovsky Institute of Mathematics and Mechanics, Ekaterinburg, Russia

    Michael Khachay

  5. FRC CSC RAS, Moscow, Russia

    Vlasta Malkova

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Olenev, N. (2023). Two Balanced Growth Paths Based on an Endogenous Production Function. In: Olenev, N., Evtushenko, Y., Jaćimović, M., Khachay, M., Malkova, V. (eds) Optimization and Applications. OPTIMA 2023. Lecture Notes in Computer Science, vol 14395. Springer, Cham. https://doi.org/10.1007/978-3-031-47859-8_19

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  • DOI: https://doi.org/10.1007/978-3-031-47859-8_19

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  • Online ISBN: 978-3-031-47859-8

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